Financials
Aug 9, 2024
How Whippet Notes is tackling undercharging in veterinary practices
Share to :
Undercharging for services is threatening the sustainability and growth of many veterinary practices. We discuss the reasons behind this trend, its far-reaching consequences, and why addressing it is crucial for the health of both animals and the veterinary profession.
Understanding the root causes of undercharging is essential to addressing this issue:
1. Wallet Guardian Disease: This term refers to the tendency of veterinary staff to reduce prices for procedures, often out of concern for clients' financial situations or a belief that they should not charge too much for their services. [1]
2. Mindset Issues: Some veterinarians may feel guilty about making money, leading them to undercharge. This mindset can be deeply ingrained and affect how they perceive their worth and the value of their services. [4]
3. Fear of Losing Clients: Many veterinarians worry that increasing prices might drive clients away, even though studies suggest that veterinary fees are relatively inelastic. [2]
The immediate effects of undercharging can be deceptively subtle but significantly impactful:
1. Reduced Profit Margins: While high-performing workplaces in Australia achieve a profit margin of 25%, the veterinary profession averages only 7-12% profitability[6]. This slim margin leaves little room for error.
2. Immediate Financial Loss: Consider this scenario: for a $200 procedure, if a veterinarian forgets to charge for a $20 medication, 10% of the potential revenue is lost. In a practice operating at 7% profitability, this single oversight pushes the transaction below the break-even point[7].
3. Cash Flow Issues: Consistent undercharging can lead to cash flow problems, making it difficult to cover operational costs and invest in necessary equipment or supplies.
Undercharging in veterinary practice not only affects the business side but also impacts patient care. Limited revenue can lead to cutting corners on equipment, diagnostics, and treatments, while overworked staff, due to increased patient loads, may experience burnout and reduced attention per patient. Additionally, practices may delay upgrades to the latest medical technologies, resulting in suboptimal diagnostic and treatment capabilities. Ultimately, undercharging compromises care standards, affecting both animal health outcomes and client satisfaction.
Undercharging in veterinary practices has broader implications for the entire industry. It perpetuates a cycle of undervaluing veterinary services, setting unrealistic expectations for pricing and service delivery. This financial strain can lead to recruitment and retention challenges, as the profession becomes less attractive to talented individuals, potentially resulting in a shortage of qualified veterinarians. Additionally, reduced profits hinder reinvestment in research and development, slowing the pace of innovation in veterinary medicine.
As the veterinary field continues to evolve, technology is playing an increasingly important role in addressing common challenges, including undercharging. One significant advancement in this area is the development of AI-powered software designed to assist with accurate billing during veterinary consultations.
Whippet Notes works by:
1. Transcription Analysis: Whippet's software uses advanced AI to read and analyse the transcription of the veterinary consultation.
2. Identification of Billable Items: Based on the content of the consultation, the AI identifies procedures, treatments, and other billable items mentioned or performed.
3. Highlighting Missed Charges: The system then highlights these billable items, ensuring that veterinarians and staff don't accidentally omit any charges when finalising the bill.
4. Reducing Cognitive Load: By automating the process of identifying billable items, this technology allows veterinarians to focus more on patient care and less on the administrative aspects of billing.
5. Improving Accuracy: The AI can catch subtle or easily overlooked billable items that a busy veterinarian might miss, especially during complex consultations.
By implementing Whippet Notes, veterinary practices can significantly reduce instances of undercharging due to oversight. This not only improves the financial health of the practice but also ensures that the value of veterinary services is appropriately recognised and compensated.
Moreover, the use of such technology can help change the mindset around charging in veterinary practices. By presenting billing as an objective, technology-driven process rather than a subjective decision, it can help alleviate some of the guilt or discomfort that veterinarians might feel about charging for their services.
As we move forward, the integration of AI and other advanced technologies in veterinary practice management will likely play a crucial role in addressing the issue of undercharging, contributing to more sustainable and thriving veterinary practices.
Undercharging in veterinary practices is not just a minor financial issue; it's a threat to the quality of animal care, the well-being of veterinary professionals, and the sustainability of the profession. By recognising the full scope of consequences and taking proactive steps to ensure fair and accurate charging, veterinary practices can secure their financial health, improve staff satisfaction, and continue to provide excellent care for their animal patients.
Remember, a profitable practice is not just about financial gain — it's about creating a sustainable environment where high-quality veterinary care can thrive and evolve. By addressing the root causes of undercharging and implementing strategies to overcome them, veterinary practices can build a stronger, more resilient profession that benefits animals, clients, and veterinary professionals alike.
1. Vet Answers. (n.d.). Does Your Veterinary Team Suffer from Wallet Guardian Disease? https://www.vetanswers.com.au/blog/post/does-your-veterinary-team-suffer-from-wallet-guardian-disease/1000920/
2. Vet Practice Magazine. (n.d.). How to raise fees and not lose patients. https://www.vetpracticemag.com.au/raise-fees-not-lose-patients/
3. ABC News. (2021). Pet surgery fees: Why your vet's prices may not be what you expect. https://www.abc.net.au/news/2021-09-25/qld-pet-surgery-fees-vet-clinics-pricing/100482206
4. Vet Answers. (n.d.). Overcoming Decreasing Profit in Veterinary Practices: A Case Study of Mansfield Vet Practice. https://www.vetanswers.com.au/blog/post/overcoming-decreasing-profit-in-veterinary-practices-a-case-study-of-mansfield-vet-practice/1016235/
5. University of Adelaide. (n.d.). How do I charge? https://set.adelaide.edu.au/animal-veterinary-sciences/vibe/student-resources/learning-guides/how-to-charge
6. Boedker, C. (2011). Leadership, Culture and Management Practices of High Performing Workplaces in Australia. https://researchers.mq.edu.au/en/publications/leadership-culture-and-management-practices-of-high-performing-wo
7. University of Adelaide. (n.d.). How do I charge? https://set.adelaide.edu.au/animal-veterinary-sciences/vibe/ua/media/9/how-do-i-charge-uoa-olt.pdf
Connected
